“Everything that we asked for, we got,” said Minister for Agriculture Simon Coveney, summing up what Budget 2016 delivered to farmers and the agriculture industry.

It would have been easy to come back with the comment that maybe he did not ask for enough. However, talking through the measures, it was clear that the industry got more than its fair share of the pre-election handouts that were on offer.

“For the second year running, Minister [for Finance Michael] Noonan singled agriculture out mentioning its strategic importance. That simply didn’t happen in the past,” said Coveney.

He had just watched the six o’clock news headlines, happy with the initial feedback the budget was getting.

Many of the taxation measures were well flagged by the time Minister Noonan stood up to address the nation shortly after 2pm on Tuesday. On his way into Government buildings ahead of the budget, An Taoiseach Enda Kenny admitted that there would be very little new news in Minister Noonan’s speech.

An increase in the Universal Social Charge (USC) threshold and cuts to the rates of USC tax came in as planned. The introduction of the new tax credit of €550 was definitely the most significant. It’s the start of removing the inequality between PAYE and self-employed that was ignored in the past.

“For farmers on the average [annual] income of €26,974, the changes will be worth €800 in additional net income,” the Minster pointed out.

From the start of the interview, it was clear that the two elements he was happiest with were the removal of the high earners restriction for active foresters and farmers and the new family transfer partnerships. Both were mentioned in last year’s agri-tax review, preparing the groundwork for their introduction this year.

“Initially we had looked at income averaging for forestry but it was turning out to be too messy. Working with Revenue, we got the perfect solution, allowing forests to be clearfelled without worrying about triggering the old €80,000 threshold,” he said.

The family transfer partnership was also improved on the initial proposals from the IFA the previous year. “We are the first country in Europe and while we have not formally submitted it for state aid rules, the informal feedback is very positive,” Sinead McPhillips, chief economist with the Department had mentioned.

The Minister said that they simply continued to look at ways to try and use the tax system to allow a structured and sensible way for farmers to transfer their farms. “A partnership agreement between the son/daughter and parents will set out the pathway and profit sharing during the transfer than can last between three and ten years,” he said.

Minister Coveney added that the €5,000 tax credit had to be divided based on the profit share of the partnership to get through state aid rules.

However, will the fact that the tax credit for €5,000 can be paid out over five years push farmers to go for at least that period?

“Yes, but the young farmer has to be under 40 to trigger the tax credit, so if they are 38 or older it could be shorter,” replied Coveney.

Approximately 2,000 farm transfer partnerships could be accommodated by the €10m set aside for the measure. With the Minister saying it was the best spend in the budget, it is clear that more will be available in future years if needed.

The continuation of four existing tax measures under stock relief and stamp duty that were all renewed for three more years, important as they are, hardly got a mention.

The Minister instead alluded to the impact last year’s tax review changes are already having in practice. Data from the Basic Payment Scheme (BPS) – formerly the Single Farm Payment – applications showed that out of the 131,591 farmers who submitted an application, 51,423 have identified they had leased land.

“That’s 39% of all farmers, a lot higher that you would have seen a few years ago,” said Minister Coveney.

To dig deeper, the Department surveyed 4,336 farmers and got 943 replies. Of these farmers, 34% had long-term leases compared to 24% with conacre. Two-thirds stated they wanted to increase the length of the lease and 27% who took on new land in 2015 did so with long-term leases. That is a significant change,” the Minister said.

Turning to the 2016 Department of Agriculture budget figures, the Minister got an additional €109m allocated to his sector. Nearly half was for schemes under the Rural Development Programme (RDP) which was boosted by €55m to €496m, an increase of 12.5%. Of the €203m allocated to agri-environment schemes, the majority, €142m, will go to GLAS. AEOS will take €48.6m.

The figures point to an additional 13,000 GLAS spaces becoming available under tranche two to open next week, an increase from the previously flagged 10,000.

The Minister challenged the suggestion that recent changes to GLAS criteria could make it difficult to get in farmers.

“The average area under low input permanent pasture in the first tranche was just 7.5ha, so the reduction to 5ha is not major. It is easier for farmers in hen harrier designation areas and other areas to now get in,” he said.

There would be no special treatment for new entrants or partnerships locked out. They can access under tranche two or tranche three, which he signalled would be opened in mid-2016.

Under the €35.8m allocation for TAMS, sheep fencing was reintroduced. “Sheep farmers asked me for the inclusion so it is now there for them to use,” he said.

Setting up a new arable TAMS scheme was not as simple. “We have to make an amendment to the RDP to get a package for arable farmers around storage, drying and ventilation. It will allow tillage farmers to have more control over when they sell their grain, helping to reduce income volatility,” the Minister added.

As expected, €52m was set aside for the Beef Data and Genomics Programme. Under the Knowledge Transfer, there was only €1.7m allocated. With most payments under this scheme not due until 2017, we have enough.

“We are looking at ways to accommodate beef and sheep farmers who want to attend two groups but they can’t be paid double, especially at the expense of additional farmers who want to get in,” the Minister said.

For many farmers, it’s the big payments under ANC and the 70% Basic Payment advance that they are waiting for this week.

“We also have GLAS and the beef genomic scheme payment before the end of the year,” he mentioned. “I am putting pressure to get the huge amount of payments out to farmers in the next week. No other country in Europe pays as early as we do,” he said.

Full coverage

Budget 2016